NZDUSD has been flattening today after the strong rebound on the 0.6500 psychological level earlier in the day. The pair remains under selling pressure as it still stands below the short-term moving averages and beneath the near-term falling trend line.
In the short-term, indicators suggest that the rally to the downside is not over yet as the MACD oscillator is strengthening its negative momentum below the trigger and zero lines in the 4-hour chart. Looking at the RSI indicator, it is moving sideways, supporting that consolidation could also emerge before the price continues bearish structure. Moreover, the 20- and 40-simple moving averages (SMAs) posted a bearish crossover on Wednesday.
Should the pair extend losses, immediate support area for investors to look at is 0.6492 – 0.6500, taken from the latest lows. Beneath the latter zone, it would be interesting to see whether the bears can unlock again the low of 0.6423, identified by the bottom on October 8.
In the alternative scenario, price advances may stall initially near the 20- and 40-SMAs at 0.6545 and 0.6556 respectively and subsequently around the 0.6565 resistance level. A potential upside violation of this level would hit the 23.6% Fibonacci retracement level of the downleg from 0.7060 to 0.6423, around 0.6572. A move higher would also coincide with a break of the downtrend line, taking the pair towards the 0.6600 handle.
Regarding to the longer-timeframe, NZDUSD has been trading bearish in the past four months after the pullback on the 0.7060 hurdle, but if the price jumps above the falling trend line, this could shift the outlook to a more neutral to bullish one. However, in the very short-term timeframe, the pair remains steady below the diagonal line.
